NFL Owners To Split Over $2 Billion When League Adds Two Teams

National Football League Commissioner Roger Goodell said Thursday the league, which currently has 32 teams, will likely add two franchises if Los Angeles gets a team. Goodell said the league "doesn't want to move any of our teams” and “we probably don’t want to go to 33” if the NFL decides expansion is a good choice.

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Goodell is the smartest league boss I have ever met (just look at the great collective bargaining agreement he negotiated for the league prior to this season without missing a single regular season game, and the new broadcasting deals he recently inked with ESPN and the networks), who chooses his words very carefully and places his intentions publicly with impeccable timing. With two competing stadium proposals for the second largest media market, there is no doubt Los Angeles will get a team sooner rather than later. And with the Super Bowl raking in record advertising revenue and poised to get its highest television audience (as sports banker Sal Galatioto discusses in the nearby video), the timing of Goodell's expansion comments were no accident.

What does this mean for the league's owners?

The Houston Texans, the last expansion team, were sold to billionaireRobert McNair for $700 million in 1999. Prior to the Texans, the league's previous expansion teams were the Jacksonville Jaguars and Carolina Panthers in 1993, which were sold for $140 million. Shahid Khan just bought the Jaguars from Wayne Weaver for $760 million, as the first transaction after the new CBA and television deals. But the Jaguars play in the league's fourth-smallest media market and do not have a big corporate sponsorship market or a state-of-the-art stadium.

No doubt at least one expansion team will be playing in Los Angeles in a new stadium and it is not inconceivable both new teams could share the same stadium, or at least be located in the Southern California market.

This means the expansion teams would fetch top dollar, likely more than the $1 billion the average NFL team valuation. Bankers put the range between $1 billion and $1.5 billion, depending on location and stadium deal. So if we use the midpoint ($1.3 billion), it means the 32 current owners would pocket about $80 million each.

Don't worry about the dilution of television revenue from broadcasters ESPN, Fox, NBC and CBS. The expansion to 34 teams would likely coincide with expanding the number of regular season games to 18, and the NFL's television fees would increase (as permitted by the deals) accordingly. Once again, Goodell is juggling the league's many balls flawlessly.